PubMatic CEO Goel Discusses Revinet Acquisition And Scale

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PubMatic Acquires RevinetYesterday, PubMatic announced that it had acquired publisher yield optimizer Revinet, According to the release, PubMatic will a new office in Boston, 15 new employees, and a set of publishers in the news vertical "including The Christian Science Monitor, A.H. Belo, Boston Herald, The Sporting News, and more." Read the release.

PubMatic CEO Rajeev Goel discussed the acquisition and its impact.

What was the cost of the transaction to PubMatic?

This was an all cash deal and will be accretive from the start.  Our business model is heavily aligned with the success of publishers on our platform, so as we ramp up publisher revenue from our advanced technology, both publishers and PubMatic will see gains. Right now the demand for quality RTB inventory outpaces the quality supply, so the ReviNet publishers will experience significant revenue growth in the near term.

Would you say this transaction is all about scale? If so, why is scale important?

This deal is not justabout scale; it is about achieving the right kind of scale. There are several sources of low quality inventory at scale, but we’re focused strictly on premium inventory and premium audience, and the vast majority of ReviNet’s publishers are in the News vertical. In terms of valuable inventory, News always ranks amongst the most sought after. When buyers want access to News-related inventory and audience at scale, they can come to us, which means that our publishers get access to high quality buyers first.

PubMatic’s reach is now at 218 million unique users in the U.S., or 95% of the U.S. Internet population. Our global reach is beyond 400 million unique users.

Scale is also important in terms of our company’s growth. In order to meet the growing demand for our platform and expand throughout Europe, we had an internal goal to reach 200 employees by the end of 2011 and with this deal we surpassed that goal with seven months to spare. We gained 15 highly valuable employees that understand this business and who can hit the ground running. This team comes from the publishing industry (Boston.com which is part of New York Times Regional) and from the online advertising industry, so they are a great team. ReviNet has a 95% publisher customer retention rate, so we didn’t just hire 15 people, we hired 15 all stars that will help our company continue to scale as we grow in the U.S and in Europe.

Will PubMatic transition ReviNet publishers to PubMatic tech immediately?

ReviNet publishers will be able to take advantage of PubMatic’s full suite of technology.  At the same time, these publishers will continue to be serviced by the same account management team they have known for the past 2 years. It’s the best of both worlds. Our technology stack includes a robust real-time bidding (RTB) platform, a brand safety suite, audience solutions, and mobile solutions.  We have invested heavily in our service capabilities over the last couple of years, and we are confident that we can ensure a great experience for ReviNet’s customers while transitioning them to the PubMatic platform.

What happens to the ReviNet team? And is there any ReviNet tech that you find additive to PubMatic's?

PubMatic has always invested heavily in advertising technology innovation, so we are not adding any new technology to our platform with this acquisition. However, we are very excited about bringing on the ReviNet team who will join us as PubMatic employees. Their team has very high standards for providing services to publishers, which are in line with our company values and standards as well. As I mentioned earlier, their team has a 95% publisher retention record, so our team and our current publishers are lucky to have them on board.

How does this transaction address the challenge of optimizing and managing a publisher's guaranteed inventory and not just remnant or non-guaranteed?

PubMatic does not sell directly to advertisers as to not conflict with the publisher’s direct sales force, rather we give them technology, insight, and services that can impact their direct sales efforts.  Now more than ever, understanding the advertiser and audience trends within the 60% to 80% of a publisher’s ad inventory that is non-guaranteed will help publishers better monetize theirdirectly sold inventory.    For example, the intelligence that publishers gain from RTB campaign insights will help them in a number of ways, including knowing what categories of their inventory or what part of their audience can demand the highest pricing, what specific advertisers their direct sales force should spend more time selling to, or even what type of content they should create more or less of depending on demand.

That type of intelligence is available on a publisher-to-publisher basis, but there are also macro trends that exist, which we can see by looking at our publisher base at large.  For macro trends, such as pricing indices, it is much better to be able to pull from a larger sample size to ensure greater accuracy, so in this regard, adding scale to our platform is important in terms of the knowledge we are able to pass along to our publisher customers.

By John Ebbert

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